2012: The year LTE becomes a standard, not a luxury
The mobile industry may well remember 2012 as the year when LTE became the dominant wireless technology in the United States.
The latest data from ABI Research projects that 87 million 4G devices will ship this year, with the lion’s share coming equipped with LTE connectivity. ABI analyst Phil Solis says that while LTE has a long way to go in becoming ubiquitous throughout the world, it’s very close to reaching a tipping point in the U.S. where it becomes a consumer expectation rather than a luxury. And ironically, Solis thinks that Sprint’s early build-out of its WiMax network has as much to do with LTE’s rapid rise here as anything else, even though Sprint has now started shifting away from WiMax to embrace LTE.
“We mostly see this in countries where WiMax was positioned to be a real threat,” says Solis, who expects that LTE’s status as the nation’s dominant wireless technology will be cemented once Apple releases an LTE-capable version of the iPhone sometime this year. “WiMax has pulled LTE forward and caused carriers to move to LTE more quickly.”
Here’s a brief overview of where LTE stands in this country: Verizon, the first carrier to commercially offer LTE, now covers more than two-thirds of the American population with its LTE network and plans to have its entire 3G footprint upgraded to LTE by the end of next year. AT&T offers LTE services in 35 major U.S. markets and its slated to launch service in at least three more soon. Sprint hasn’t yet officially fired up its own LTE network but will likely start offering services in four markets in the near future since the company has already announced its first two LTE-capable handsets this month. And T-Mobile, with its acquisition of extra AWS spectrum in the wake of the failed AT&T merger, is poised to offer its own LTE services sometime in 2013.
As LTE becomes the de facto mobile data standard, Solis says that consumers can expect more intense competition to lower prices for mobile data across the board since consumers won’t be forced to go with Verizon anymore if they want access to the fastest mobile broadband technology. Right now he says that some LTE data plans are pricey since carriers want to recoup some of the capital expenditures they’ve paid to build out their networks. But as more and more users sign up for the services, the cost of delivering data will go down and carriers will face pressure to lower rates.
Solis’ comments on competitive pressure in the LTE market jibe with comments recently made by IEEE veteran Roberto Saracco, who said that this week that carriers are able to charge a premium for LTE because it’s seen as more of a cutting-edge technology. Like Solis, Saracco predicted that prices would come down once more LTE networks came online and carriers faced stronger competition.
LTE, which stands for Long Term Evolution, is essentially a bridge from 3G technologies such as HSPA+ and EV-DO Rev. A to the 4G IMT-Advanced technologies that the International Telecommunications Union (ITU) says will deliver consistent speeds in the 100Mbps range.